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The recent surge in Bitcoin‘s price to over $70,000 has unveiled an intriguing trend among traders, particularly in terms of Open Interest.
As Bitcoin crossed the $70,000 milestone, the Open Interest in BTC saw a notable uptick, signaling heightened activity among traders despite the market’s high volatility. This surge in Open Interest, which added a billion dollars to Bitcoin markets in the last 24 hours alone, suggests increased leverage within the market, potentially amplifying price fluctuations in either direction.
However, this surge in Open Interest contrasts with the significant liquidations observed among Bitcoin traders in the same period. Data from Coinglass reveals that over 67,000 traders faced liquidation within the last 24 hours, totaling nearly $190.70 million in losses. The largest individual liquidation, valued at $1.94 million, occurred on Bybit for the BTCUSD pair. Despite these liquidations, approximately $1.18 billion in leverage is positioned just above the $73,000 threshold, indicating traders’ willingness to maintain bullish positions.
In line with this sentiment, the percentage of long positions in the market has increased from 48% to 51%. However, there are potential hindrances to Bitcoin’s growth, such as the spike in the MVRV ratio, indicating that most BTC holders are currently in profit. This could lead to increased profit-taking and subsequent price corrections as Bitcoin’s price continues to rise.
Additionally, the Long/Short difference for BTC has grown, suggesting that a significant portion of Bitcoin holders are long-term investors less likely to react impulsively to market fluctuations. These holders, characterized by older addresses, are more inclined to hold onto their investments despite short-term market movements, potentially stabilizing Bitcoin’s price amidst increased volatility.
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